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R. Ross Burris, Shareholder
Polsinelli
Tynan P. Olechny, Principal
Valerie G. Rock, Consulting Manager
PYA
How to Have a S...
Prepared for HCCA Regional Conference Atlanta 2016page | 2
Objectives
Getting Engaged
• Understand common pre-
transaction...
Prepared for HCCA Regional Conference Atlanta 2016page | 3
Getting Engaged
▪ Various ways to get engaged
▪ Numerous legal ...
Prepared for HCCA Regional Conference Atlanta 2016page | 4
Various Ways to Get Engaged
Independent
Physician and
Independe...
Prepared for HCCA Regional Conference Atlanta 2016page | 5
Numerous Regulatory and Legal Issues
• State and federal fraud ...
Prepared for HCCA Regional Conference Atlanta 2016page | 6
It’s All About the Plan
 Understand the
Complex
Regulatory
Env...
Prepared for HCCA Regional Conference Atlanta 2016page | 7
They’re All Watching You
RACs/
ZPICs
State
Legislatures
State A...
Prepared for HCCA Regional Conference Atlanta 2016page | 8
The Intricate Compliance Web
▪ State and Federal Agencies
▪ Car...
Prepared for HCCA Regional Conference Atlanta 2016page | 9
State and Federal Laws & Regulations
Laws
▪ Affordable Care Act...
Prepared for HCCA Regional Conference Atlanta 2016page | 10
The Bad Boys of Healthcare Justice -
Ft. Anti-Kickback Statute...
Prepared for HCCA Regional Conference Atlanta 2016page | 11
AKS (cont.)
▪ Regulated by the Office of Inspector General (OI...
Prepared for HCCA Regional Conference Atlanta 2016page | 12
The Bad Boys of Healthcare Justice -
Ft. Physician Self-Referr...
Prepared for HCCA Regional Conference Atlanta 2016page | 13
Stark (cont.)
▪ DHS is a defined term (e.g., DME equipment and...
Prepared for HCCA Regional Conference Atlanta 2016page | 14
The Bad Boys of Healthcare Justice -
Ft. False Claims Act (FCA...
Prepared for HCCA Regional Conference Atlanta 2016page | 15
FCA (cont.)
▪ Bootstrapping to AKS Claims
▪ ACA allows the gov...
Prepared for HCCA Regional Conference Atlanta 2016page | 16
The Bad Boys of Healthcare Justice -
Ft. HIPAA & HITECH
▪ The ...
Prepared for HCCA Regional Conference Atlanta 2016page | 17
HIPAA & HITECH (cont.)
▪ Further requirements:
▪ Covered Entit...
Prepared for HCCA Regional Conference Atlanta 2016page | 18
Careful Planning Required
▪ Initiate confidentiality and non-s...
Prepared for HCCA Regional Conference Atlanta 2016page | 19
Careful Planning Required (cont.)
▪ Identify assets to be acqu...
Prepared for HCCA Regional Conference Atlanta 2016page | 20
Careful Planning Required (cont.)
▪ Other “up front” considera...
Prepared for HCCA Regional Conference Atlanta 2016page | 21
Careful Planning Required (cont.)
▪ Other “up front” considera...
Prepared for HCCA Regional Conference Atlanta 2016page | 22
Coding and Compliance Considerations
▪ Detailed analysis of da...
Prepared for HCCA Regional Conference Atlanta 2016page | 23
Data Analysis & Risk Assessment: Internal Data
▪ Benchmark:
▪ ...
Prepared for HCCA Regional Conference Atlanta 2016page | 24
Data Analysis & Risk Assessment: External Data
▪ Publically re...
Prepared for HCCA Regional Conference Atlanta 2016page | 25
Data Analysis and Risk Assessment: Tip
▪ Be careful of exposin...
Prepared for HCCA Regional Conference Atlanta 2016page | 26
Anticipate Practice Changes
▪ Practice pattern changes, once e...
Prepared for HCCA Regional Conference Atlanta 2016page | 27
Due Diligence
▪ Traditional Purpose: obtain information about ...
Prepared for HCCA Regional Conference Atlanta 2016page | 28
The Due-Diligence Balancing Act
 Educate C-Suite on importanc...
Prepared for HCCA Regional Conference Atlanta 2016page | 29
Financial and Operational Due Diligence
▪ Historical compensat...
Prepared for HCCA Regional Conference Atlanta 2016page | 30
Financial and Operational Due Diligence
▪ Staffing complement ...
Prepared for HCCA Regional Conference Atlanta 2016page | 31
Valuation Documentation
▪ Documenting and validating supportin...
Prepared for HCCA Regional Conference Atlanta 2016page | 32
Finally…
▪ Before closing, prepare a post-closing checklist no...
Prepared for HCCA Regional Conference Atlanta 2016page | 33
Honeymooning
▪ Most parties go into the relationship with the
...
Prepared for HCCA Regional Conference Atlanta 2016page | 34
Honeymooning “To Dos”
▪ Monitor physician behavior changes
▪ C...
Prepared for HCCA Regional Conference Atlanta 2016page | 35
Wedding Catastrophes
 Successor Liability for Overpayments
▪ ...
Prepared for HCCA Regional Conference Atlanta 2016page | 36
Wedding Catastrophes
 Fraud and Abuse/Physician Compensation ...
Prepared for HCCA Regional Conference Atlanta 2016page | 37
Triggers for Physician Behavior Changes
▪ Compensation based o...
Prepared for HCCA Regional Conference Atlanta 2016page | 38
Common Behavior Changes -
Compensation Based on wRVUs
▪ Upcodi...
Prepared for HCCA Regional Conference Atlanta 2016page | 39
Commonly Audited Modifiers
▪ 25 - Separate E/M on the same day...
Prepared for HCCA Regional Conference Atlanta 2016page | 40
Modifier 25
Modifier 25: Significant, Separately Identifiable ...
Prepared for HCCA Regional Conference Atlanta 2016page | 41
Time: Risk
▪ Using time as a work-around to documenting
▪ Comb...
Prepared for HCCA Regional Conference Atlanta 2016page | 42
Tip
▪ Billing and compliance staff should be educated on:
▪ Pl...
Prepared for HCCA Regional Conference Atlanta 2016page | 43
Common Behavior Changes:
Provider Education
▪ Education and cl...
Prepared for HCCA Regional Conference Atlanta 2016page | 44
Common Behavior Changes:
Changes in What Drives Physician Comp...
Prepared for HCCA Regional Conference Atlanta 2016page | 45
Continually Audit, Monitor and Track
▪ Conduct regular billing...
Prepared for HCCA Regional Conference Atlanta 2016page | 46
Renew Your Vows
▪ Timing of renewal
▪ Commit to fair market va...
Prepared for HCCA Regional Conference Atlanta 2016page | 47
When to Renew Your Vows
▪ Conduct thorough review of contracts...
Prepared for HCCA Regional Conference Atlanta 2016page | 48
Commit to FMV and CR Reviews
▪ Even if agreement is for multip...
Prepared for HCCA Regional Conference Atlanta 2016page | 49
Special Considerations
▪ Administration of contract
▪ Appropri...
Prepared for HCCA Regional Conference Atlanta 2016page | 50
Special Considerations
▪ Contract mitigation based on audit re...
Prepared for HCCA Regional Conference Atlanta 2016page | 51
Questions?
R. Ross Burris, III – rburris@polsinelli.com
Polsin...
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How to Have a Successful Engagement and a Happily Ever After: “New Age” Nuances to Physician Hospital Arrangements

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PYA’s Tynan Olechny and Valerie Rock presented “How to Have a Successful Engagement and a Happily Ever After: ‘New Age’ Nuances to Physician Hospital Arrangements” with R. Ross Burris III of Polsinelli at the Health Care Compliance Association’s (HCCA) Regional Annual Conference.

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How to Have a Successful Engagement and a Happily Ever After: “New Age” Nuances to Physician Hospital Arrangements

  1. 1. R. Ross Burris, Shareholder Polsinelli Tynan P. Olechny, Principal Valerie G. Rock, Consulting Manager PYA How to Have a Successful Engagement and a Happily Ever After: “New Age” Nuances to Physician-Hospital Arrangements HCCA Regional Conference Atlanta 2016
  2. 2. Prepared for HCCA Regional Conference Atlanta 2016page | 2 Objectives Getting Engaged • Understand common pre- transaction legal and regulatory compliance pitfalls including due- diligence opportunities Honeymooning • Learn to successfully implement key operational and compliance success factors in ongoing relationship management to ensure long-term success Renewing your vows • Present best practices to ensure a successful anniversary, including critical planning steps and considerations in contract renewals
  3. 3. Prepared for HCCA Regional Conference Atlanta 2016page | 3 Getting Engaged ▪ Various ways to get engaged ▪ Numerous legal and regulatory considerations ▪ Careful planning required ▪ Coding and compliance considerations ▪ Financial and operational due diligence ▪ Valuation documentation
  4. 4. Prepared for HCCA Regional Conference Atlanta 2016page | 4 Various Ways to Get Engaged Independent Physician and Independent Medical Staff Privileges Cooperation through Professional Services Contract - Medical Director - Call Coverage - Other Professional Services Direct Employment Employment through Affiliates Purchase Physician Practice and Employ Physicians Clinical and Contractual Joint Ventures Ambulatory Surgery Center Imaging Modality PHO Management Services Service Line Co- Management Agreements CIN PHO ACO
  5. 5. Prepared for HCCA Regional Conference Atlanta 2016page | 5 Numerous Regulatory and Legal Issues • State and federal fraud and abuse • Anti-trust • Provider-based requirements • Physician/provider credentialing • Licensure/CLIA/Pharmacy • Change of ownership documentation/notification • Group purchasing organization purchasing/340B pricing • Commercial reasonableness (i.e., need for services, financial viability, etc.)
  6. 6. Prepared for HCCA Regional Conference Atlanta 2016page | 6 It’s All About the Plan  Understand the Complex Regulatory Environment  Be Aware of Recent Compliance Trends  Understand the Forces Driving Integration  Know the High Cost of Poor Planning
  7. 7. Prepared for HCCA Regional Conference Atlanta 2016page | 7 They’re All Watching You RACs/ ZPICs State Legislatures State AGs Congress Medicaid HHS FTC FDA DOJ Plaintiff Lawyers Commercial Payors Personal Injury Litigants Competitors OIG PRESS Medicare/CMS YOU State Licensing Agencies SEC Whistle- blowers
  8. 8. Prepared for HCCA Regional Conference Atlanta 2016page | 8 The Intricate Compliance Web ▪ State and Federal Agencies ▪ Carrying out ▪ State and Federal Laws ▪ In partnership with ▪ Private and Public Organizations
  9. 9. Prepared for HCCA Regional Conference Atlanta 2016page | 9 State and Federal Laws & Regulations Laws ▪ Affordable Care Act (ACA) ▪ Anti-Kickback Statute (AKS) ▪ Stark Law ▪ Civil Monetary Penalties (CMP) ▪ False Claims Act (FCA) ▪ Social Security Act (SSA) ▪ HIPAA & HITECH ▪ State Physician Self-Referral (Baby Stark) ▪ CON ▪ CPOM & Fee Splitting Regulations ▪ Conditions of Participation ▪ Enrollment & Recertification ▪ Reimbursement ▪ Licensure ▪ Assignment ▪ Suspension and Exclusion ▪ Antitrust
  10. 10. Prepared for HCCA Regional Conference Atlanta 2016page | 10 The Bad Boys of Healthcare Justice - Ft. Anti-Kickback Statute (AKS) ▪ Prohibits the “knowing” and “willful” offer, payment, solicitation, receipt or facilitation of remuneration– i.e., both sides of any kickback ▪ Intent Required ▪ “Remuneration” defined broadly as anything of value including cash, discounts, rebates, and even free goods ▪ Applies to arrangements involving items or services reimbursed in whole OR in part by a Federal Healthcare Program ▪ Virtually any type of marketing program or marketing relationship with a physician, long-term care facility, or other provider can implicate the AKS ▪ Applies to virtually any financial relationship with any party in a position to refer or recommend business
  11. 11. Prepared for HCCA Regional Conference Atlanta 2016page | 11 AKS (cont.) ▪ Regulated by the Office of Inspector General (OIG) and the Department of Justice (DOJ) ▪ Criminal + Civil penalties - fines, imprisonment, potential Medicare/Medicaid exclusion, potential “bootstrapped” False Claims Act claims: ▪ 5 year prison or $25K per violation ▪ Up to 5-year exclusion ▪ 3x remuneration offered + 50K per violation ▪ “Safe Harbors” are “voluntary,” but if met, immunize the arrangement from prosecution ▪ "Safe Harbors" are narrowly drawn and there is no "marketing" safe harbor
  12. 12. Prepared for HCCA Regional Conference Atlanta 2016page | 12 The Bad Boys of Healthcare Justice - Ft. Physician Self-Referral Act (Stark) ▪ “a physician [or their immediate family member] who has a direct or indirect financial relationship with [a DHS] entity, may not make a referral for the furnishing of DHS for which payment otherwise may be made under Medicare.” ▪ Strict Liability – NO INTENT REQUIRED ▪ An entity that furnishes DHS pursuant to a prohibited referral may not present or cause to be presented a claim or bill to the Medicare program or to any individual, third party payer, or other entity for the DHS performed pursuant to the prohibited referral
  13. 13. Prepared for HCCA Regional Conference Atlanta 2016page | 13 Stark (cont.) ▪ DHS is a defined term (e.g., DME equipment and supplies, home health, prosthetics) ▪ Physician is a defined term ▪ Financial Relationship is…a defined term ▪ ONLY applies to “Physicians” (and those that the physician deals with) and “Medicare” BUT ▪ Applies to referrals between any third-party DHS entities AND even the physician’s own practice entity ▪ UNLESS AN EXCEPTION IS MET
  14. 14. Prepared for HCCA Regional Conference Atlanta 2016page | 14 The Bad Boys of Healthcare Justice - Ft. False Claims Act (FCA) FCA 101 Treble damages and fines for knowingly:  Filing a false claim with the Federal government, or causing the filing of a false claim  Creating a false record in order to get a claim paid  Conspiring to get a false claim paid, or  Concealing an obligation to repay monies owed to the Federal government.
  15. 15. Prepared for HCCA Regional Conference Atlanta 2016page | 15 FCA (cont.) ▪ Bootstrapping to AKS Claims ▪ ACA allows the government to “bootstrap” an FCA claim to an AKS claim, arguing, in essence that the kickback relationship made the claim false. ▪ Qui Tam Relators ▪ FCA allows individuals to bring suit against companies as qui tam relators. ▪ 60-Day Rule ▪ Failing to return “identified” overpayment w/in 60 days. ▪ Bottom Line ▪ Violating AKS, the Stark Law or failing to return overpayments 60 days after identifying may create FCA liability even with an indirect seller of goods or services.
  16. 16. Prepared for HCCA Regional Conference Atlanta 2016page | 16 The Bad Boys of Healthcare Justice - Ft. HIPAA & HITECH ▪ The Health Insurance Portability and Accountability Act (HIPAA) and the related Health Information Technology for Economic and Clinical Health (HITECH) ▪ HIPAA requires Covered Entities and their Business Associates to protect Private Health Information (PHI) ▪ HITECH has specific security standards for PHI and requires mandatory disclosure when a data breach has occurred
  17. 17. Prepared for HCCA Regional Conference Atlanta 2016page | 17 HIPAA & HITECH (cont.) ▪ Further requirements: ▪ Covered Entities must conduct security assessments to identify vulnerabilities ▪ Business Associates are also subject to audit & investigation ▪ Covered Entities must report Business Associate breaches of unsecured PHI ▪ OCR may open a compliance review to investigate any reported breach of unsecured PHI ▪ Covered Entities have greater liability if Business Associate is acting as “agent” ▪ Unclear how OCR is interpreting this term
  18. 18. Prepared for HCCA Regional Conference Atlanta 2016page | 18 Careful Planning Required ▪ Initiate confidentiality and non-solicitation agreements ▪ Assemble the “engagement team” ▪ Board of Directors, administration (C-suite), legal, compliance, finance, operations, human resources ▪ Outside counsel ▪ Appraisers to conduct business and compensation valuations ▪ Execute letter of intent (LOI) or term sheet
  19. 19. Prepared for HCCA Regional Conference Atlanta 2016page | 19 Careful Planning Required (cont.) ▪ Identify assets to be acquired ▪ Permits/licenses/certifications/government approvals ▪ Rights under contracts (vendors, suppliers, software, etc.) ▪ All tangible and personal property (FFE) ▪ Inventories of supplies, purchased goods, drugs, etc. ▪ Intellectual property ▪ Rights under leases ▪ Prepaids; security deposits ▪ Patient records ▪ EHR ▪ Personnel
  20. 20. Prepared for HCCA Regional Conference Atlanta 2016page | 20 Careful Planning Required (cont.) ▪ Other “up front” considerations ▪ Length of agreement ▪ Minimum period of time that party cannot terminate "without cause" ▪ Compensation structure ▪ Minimum guaranteed base salary plus productivity bonus ▪ Compensation or collections/wRVU (for PSA) ▪ Incorporation of quality component ▪ Specific reference to modifier adjusted, personally performed wRVUs ▪ Consistent compensation terms, subject to existing practice metrics
  21. 21. Prepared for HCCA Regional Conference Atlanta 2016page | 21 Careful Planning Required (cont.) ▪ Other “up front” considerations (cont.) ▪ Inclusion of clause that expects the provider to bill according to government and commercial payer requirements ▪ Renegotiating leverage tied to individual performance ▪ Compensation at all times must be subject to fair market value and commercial reasonableness requirements ▪ Include clause for assessing contract if a specific % shift in coding or wRVU totals occurs from year to year ▪ Any obvious unbundled codes to be excluded at true up ▪ Noncompetes – duration, scope of services, geographic scope ▪ Unwind provisions
  22. 22. Prepared for HCCA Regional Conference Atlanta 2016page | 22 Coding and Compliance Considerations ▪ Detailed analysis of data and assessment of risk ▪ Internal ▪ External ▪ Anticipate practice changes
  23. 23. Prepared for HCCA Regional Conference Atlanta 2016page | 23 Data Analysis & Risk Assessment: Internal Data ▪ Benchmark: ▪ Evaluation and Management (E/M) services ▪ Procedures (high use of at-risk procedures) ▪ Use of modifiers ▪ wRVUs (productivity)
  24. 24. Prepared for HCCA Regional Conference Atlanta 2016page | 24 Data Analysis & Risk Assessment: External Data ▪ Publically reported data ▪ Highest utilizers of codes or modifiers are targets for audits ▪ OIG, CERT, RAC audit activity; recent CIAs
  25. 25. Prepared for HCCA Regional Conference Atlanta 2016page | 25 Data Analysis and Risk Assessment: Tip ▪ Be careful of exposing issues ▪ Once exposed, issues must be addressed ▪ Ensure due diligence is only as aggressive as the hospital’s ability to react to potential issues
  26. 26. Prepared for HCCA Regional Conference Atlanta 2016page | 26 Anticipate Practice Changes ▪ Practice pattern changes, once employed, that change the data ▪ Shift to provider-based ▪ Nonphysician provider (NPP) services/utilization ▪ Shift of ancillary services to the hospital
  27. 27. Prepared for HCCA Regional Conference Atlanta 2016page | 27 Due Diligence ▪ Traditional Purpose: obtain information about what is material to the Seller’s business and identify items that may need additional attention and analysis. ▪ Typical requests include information regarding: • Corporate Documents • Legal Issues and Govt. Investigations • Accounting and Financial Statements • Licensure and Certifications • Assets and Liens • Compliance Program and Training • Material Contracts and Payor Agreements • Privacy and Security • Real Property – Owned/Leased • Employees / Independent Contractors • Intellectual Property • Medical Staff • Insurance • Environmental
  28. 28. Prepared for HCCA Regional Conference Atlanta 2016page | 28 The Due-Diligence Balancing Act  Educate C-Suite on importance of including compliance ON THE FRONT END of deals ▪ Have Due-Diligence Plan ▪ Clearly Define Goals ▪ Select tools (interviews, document review, etc.) ▪ Stay within parameters ▪ 60-Day Rule = Due-Diligence Balancing Act
  29. 29. Prepared for HCCA Regional Conference Atlanta 2016page | 29 Financial and Operational Due Diligence ▪ Historical compensation ▪ Historical billing and collections activities ▪ Overhead expenses ▪ Staff ▪ Rent ▪ Malpractice insurance ▪ Physician and staff benefits
  30. 30. Prepared for HCCA Regional Conference Atlanta 2016page | 30 Financial and Operational Due Diligence ▪ Staffing complement and ratios ▪ Payer mix ▪ Credentialing considerations ▪ Medicare/Medicaid processing times can be lengthy ▪ Future billing and collection activities ▪ Who will conduct?
  31. 31. Prepared for HCCA Regional Conference Atlanta 2016page | 31 Valuation Documentation ▪ Documenting and validating supporting documentation for physician compensation ▪ Physician needs assessment ▪ Documenting calculation of designated health services ▪ Be cognizant of any "special" arrangements for physicians (e.g., anything that differentiates one physician's contract from the general provisions of other physician contracts) ▪ Obtain fair market valuation opinion to support physician compensation arrangements
  32. 32. Prepared for HCCA Regional Conference Atlanta 2016page | 32 Finally… ▪ Before closing, prepare a post-closing checklist noting action items for issues identified during due diligence. Don't let issues identified during diligence get lost in the shuffle! ▪ Addressing issues as soon after closing as possible assists in risk reduction. ▪ Compile a post-integration multi-disciplinary team and assign responsibilities for post-closing projects. ▪ If possible, schedule post-close plan kickoff call and regular team meetings to discuss the status of post-close projects.
  33. 33. Prepared for HCCA Regional Conference Atlanta 2016page | 33 Honeymooning ▪ Most parties go into the relationship with the intention of being “in it for the long haul.” ▪ Post-integration process may take longer than the planning/negotiation, due diligence, and transaction closing steps combined. ▪ The length and complexity of the post- integration process will vary depending on the type of transaction entered. ▪ Thorough due diligence on the front end will help ensure a carefree honeymoon period.
  34. 34. Prepared for HCCA Regional Conference Atlanta 2016page | 34 Honeymooning “To Dos” ▪ Monitor physician behavior changes ▪ Continually audit, track and communicate ▪ Create or confirm audit and disciplinary policies are clear and enforcable/enforced
  35. 35. Prepared for HCCA Regional Conference Atlanta 2016page | 35 Wedding Catastrophes  Successor Liability for Overpayments ▪ United States v. Vernon Home Health, Inc., 21 F.3d 693, 5th Cir. 1994 (Nursing home successor liable for predecessor’s overpayments in asset purchase b/c federal law preempts state corporate law and provider number was assigned)  Antitrust ▪ Federal Trade Commission v. St. Luke's Health System, Ltd. Case No. 1:12-CV-00560-BLW and 1:13-CV-00116-BLW (D. Idaho 2014) (Merger would result in anticompetitive pricing that could not be overcome by efficiencies and ordered divestiture)
  36. 36. Prepared for HCCA Regional Conference Atlanta 2016page | 36 Wedding Catastrophes  Fraud and Abuse/Physician Compensation and Leasing Issues ▪ Intermountain Health Care, Inc., Settlement Agreement (2013) ▪ U.S. ex rel. Osheroff v. Tenet Healthcare, Case No. 09-22253- CIV-HUCK/O'SULLIVAN (S.D. Fla 2013) ▪ U.S. ex rel. Schubert v. All Children's Health System, Inc., Case No. 8:11-cv-1687-T-27-EAJ (M.D. Fla 2013) ▪ U.S. ex rel. Hector Luque v. Adventist Health, Case No. 2:08- 01272 (E.D. Cal. 2013) ▪ 60-Day Rule ▪ Kane v. Healthfirst Inc. et al. and U.S. v. Continuum Health Partners Inc. et al., Case No. 1:11-cv-02325, (S.D.N.Y. 2015)
  37. 37. Prepared for HCCA Regional Conference Atlanta 2016page | 37 Triggers for Physician Behavior Changes ▪ Compensation based on wRVUs ▪ Provider education ▪ Changes in what drives the physician’s compensation
  38. 38. Prepared for HCCA Regional Conference Atlanta 2016page | 38 Common Behavior Changes - Compensation Based on wRVUs ▪ Upcoding E/M services ▪ Unbundling E/M services ▪ Minor vs. major global periods ▪ Unbundling surgeries ▪ Tip: ▪ If billing departments are not monitoring for correct coding, the claim can be submitted with more codes than are paid or correct ▪ If compliance departments are not monitoring for correct coding compared to documentation, there is increased risk for overpayment
  39. 39. Prepared for HCCA Regional Conference Atlanta 2016page | 39 Commonly Audited Modifiers ▪ 25 - Separate E/M on the same day as a Minor Procedure ▪ 57 - Separate E/M on the same day or day before as a Major Procedure ▪ 58 - Staged or Related Procedure During a Global Period ▪ 59 - Distinct Procedural Service ▪ 78 - Unplanned Return to the OR/Related Procedure ▪ 79 - Unrelated Procedure During the Global Period
  40. 40. Prepared for HCCA Regional Conference Atlanta 2016page | 40 Modifier 25 Modifier 25: Significant, Separately Identifiable E/M Service by the Same Physician on the Same Day of the Procedure or Other Service ▪ If a procedure has a global period of 000 or 010 days, it is defined as a minor surgical procedure ▪ The decision to perform a minor surgical procedure is included in the payment for the minor procedure and should NOT be reported separately ▪ If a significant and separately identifiable E/M service is performed, and it is unrelated to the decision to perform the procedure, then it can be separately reported
  41. 41. Prepared for HCCA Regional Conference Atlanta 2016page | 41 Time: Risk ▪ Using time as a work-around to documenting ▪ Combining E/M time with the time spent performing other procedures/services ▪ Psychiatric codes ▪ Not documenting time ▪ Assuming time captured in EHR ▪ Too difficult to keep up with
  42. 42. Prepared for HCCA Regional Conference Atlanta 2016page | 42 Tip ▪ Billing and compliance staff should be educated on: ▪ Place of service requirements ▪ Modifiers to identify provider-based ▪ If a practice is provider-based or just a specific location is ▪ How to bill for NPPs in order to identify personally performed services vs NPP services and correct billing to Medicare and Medicaid
  43. 43. Prepared for HCCA Regional Conference Atlanta 2016page | 43 Common Behavior Changes: Provider Education ▪ Education and close monitoring can correct physician coding to be more accurate which can increase or decrease wRVUs ▪ limited prospective reviews ▪ shadowing ▪ and lots of education initially ▪ limit exposure on new providers ▪ Lack of education and monitoring can lead to physician manipulation of the system
  44. 44. Prepared for HCCA Regional Conference Atlanta 2016page | 44 Common Behavior Changes: Changes in What Drives Physician Compensation ▪ Change in practice patterns due to NPPs not being included in the calculation ▪ Shift in work flow ▪ Tip: Confirm omission of NPP services ▪ Ancillary services no longer directly related ▪ Orders may decrease ▪ Do not forget to include supervision for services for which physicians can no longer directly bill (e.g., infusion supervision)
  45. 45. Prepared for HCCA Regional Conference Atlanta 2016page | 45 Continually Audit, Monitor and Track ▪ Conduct regular billing and coding audits ▪ How often would we recommend? ▪ Conduct periodic operational assessments to ensure best practices are in place ▪ Provide feedback to physicians routinely ▪ Production ▪ Quality metrics ▪ Financial performance
  46. 46. Prepared for HCCA Regional Conference Atlanta 2016page | 46 Renew Your Vows ▪ Timing of renewal ▪ Commit to fair market value and commercial reasonableness compliance reviews ▪ Special considerations
  47. 47. Prepared for HCCA Regional Conference Atlanta 2016page | 47 When to Renew Your Vows ▪ Conduct thorough review of contracts to identify which contracts to keep and which contracts to terminate or renegotiate ▪ Many contracts require 30 to 90 days to terminate without cause ▪ Plan accordingly especially if anticipating significant changes to agreement terms, arrangement structures, defined quality metrics, etc.
  48. 48. Prepared for HCCA Regional Conference Atlanta 2016page | 48 Commit to FMV and CR Reviews ▪ Even if agreement is for multiple years, may still need to evaluate for compliance with fair market value and commercial reasonableness ▪ Valuation period may be for only 1 year or 2 years when agreement is for 3 years ▪ Survey benchmarks and reimbursement changes annually ▪ Quality metrics re-evaluation to ensure robustness ▪ Impacts of behavior changes
  49. 49. Prepared for HCCA Regional Conference Atlanta 2016page | 49 Special Considerations ▪ Administration of contract ▪ Appropriate calculation of wRVUs ▪ Modifier adjusted and personally performed ▪ Bonus calculated based on correct threshold ▪ Achievement of quality metrics appropriately tracked and recorded ▪ Medical director time sheets completed
  50. 50. Prepared for HCCA Regional Conference Atlanta 2016page | 50 Special Considerations ▪ Contract mitigation based on audit results ▪ Compliance rate impact on bonus ▪ Deduction of overpayments to bonus ▪ Need for self-disclosure?
  51. 51. Prepared for HCCA Regional Conference Atlanta 2016page | 51 Questions? R. Ross Burris, III – rburris@polsinelli.com Polsinelli, P.C. (404) 523-6010 www.polsinelli.com Twitter: @ATLHealthLawyer Tynan P. Olechny – tolechny@pyapc.com Valerie G. Rock – vrock@pyapc.com Pershing Yoakley & Associates, P.C. (404) 266-9876 www.pyapc.com

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